MercoPress. South Atlantic News Agency

Argentina: the icon of Kirchners' business friends sentenced to 12 years in jail for money laundering

Lazaro Baez, was granted almost a billion US dollar in public works contracts during a decade

Argentine justice despite its disrepute has inflicted a mighty blow to the dominant force of the country's political system since 2003, the Nestor and Cristina Kirchner couple, currently headed by the widow Cristina Fernandez de Kirchner.

The case is known as the “route of the K money” and involves one of Argentina's strongest public works contractors, Lazaro Baez, who in a few years turned from a humble bank cashier in the Patagonia province of Santa Cruz into a tycoon, given his close links with the Kirchners who generously awarded him the contracts, so much that he is believed to be Nestor Kirchner's front man.

This specific corruption case refers to the money laundering of US$ 60 million, which was revealed by Buenos Aires media, and filmed in an office where the money was not only counted but weighed. Baez was sentenced to twelve years in jail, his four children also with terms of three to nine years, as well as most of Baez immediate staff and advisors. The Rio Gallegos tycoon also has to return the US$ 60 million plus another US$ 480 million, of uncompleted contracts, fines and other illegalities.

The extreme south province of Santa Cruz, sparsely inhabited but rich in mineral resources, farming and fisheries, has been for the last thirty years the turf of the Kirchner family who control the three branches of the provincial government. When Nestor Kirchner became Argentine president in 2003, he moved his structure and government resources skinning practices to Buenos Aires.

A crucial role was played by Baez who opened his public works company, Austral Construcciones, and rapidly became the privileged contractor of the Kirchner administration with inflated prices, uncompleted works, and spending the funds in purchasing residences, farms, preferred plots of land, expensive cars and constructing hotels. Much of this was then transferred or shared with the Kirchner family through inflated sales of real estate and contracting at exorbitant rates for hotel rooms.

During the Kirchner years Baez was considered the icon of the so called K business people closely linked to the administration who became rich overnight. With the help of Swiss prosecutors, Argentine justice was able to prove where some of the Baez laundered money went and its beneficiaries, and thus the jail terms for the active members of the family, the two boys, and lesser sentences for the passive members, the two sisters. Some of the funds deposited in overseas tax havens would return to Argentina for the purchase of all sort of assets.

But under Argentine law money laundering implies the existence of a previous crime from there the illegal funds proceeded, and this could become the condemning catch for Cristina Fernandez. That is awarding the public works contracts ignoring bidding procedures, and benefitting certain companies such as Austral Construcciones, which must be added was rarely monitored or controlled it effectively delivered.

With the patronage of Nestor Kirchner, as he climbed from mayor of Rio Gallegos, to Santa Cruz governor, and president of Argentina, Baez was awarded public works involving close to a billion US dollars in a decade. This allowed Baez to acquire some 265,000 hectares of farmland, most public works companies in Patagonia, plus hundreds of homes and urban plots of land in privileged resorts.

Although Argentine justice acts with certain parsimony, with ears to the ground to keep track of political winds, the sentencing of Lazaro Baez on money laundering charges is an extraordinary event, and although Cristina Kirchner is not directly linked she must explain the workings of the public works contracts awarding that led to the emergence of a bank cashier turned into a major money launderer, among other issues, which also involve her children, Máximo and Florencia..

And given the fragility of the current Alberto Fernandez administration, and such incompetence in the management of the coronavirus pandemic: VIP vaccine halls or home vaccinating of friends and political allies, public opinion is anticipated to become increasingly frustrated and disenchanted with Kirchnerism, and its chances to keep a comfortable majority in the coming midterm elections. The pandemic has cost the lives of 51,000 Argentines and it is emerging that although only half of sanitary staff has been vaccinated, members of the political system and their families and immediate staff have enjoyed the benefit of inoculation, while doctors, nurses and grannies have been ignored